China's current account surplus to stay despite sharp drop

BEIJING - China's current account surplus is going nowhere in the near future despite a sharp drop in the first quarter, official data showed Thursday.

Surplus under the current account stood at $39.3 billion for the first three months ending in March, down 54 percent year on year, according to the State Administration of Foreign Exchange (SAFE).

The foreign exchange regulator attributed the plunge to shrinking surplus for trade in goods, which dropped 11 percent over the period mainly due to lackluster demand in global market.

Expanding deficit for trade in services, which surged 47 percent over the three months mainly due to a 33-percent increase in deficit in the tourism sector, was also to blame.

SAFE expects China to continue posting surplus for trade in goods in the near future, as its exports picked up from March to May, the global economy is slowly recovering, prices of commodities are likely to remain low, and the domestic demand remains stable.

Despite lingering deficit for trade in services, the surplus under the current account, which is dominated by trade in goods, is very likely to stay in the near future and at a stable level compared to the country's gross domestic product (GDP), according to SAFE.